A lawyer acting for UBS clients in the US has told WealthBriefing why they are entitled to get information explaining why their details were handed over to US judicial authorities in February.

As reported last week, the Swiss Financial Market Supervisory Authority was told by a judge in Bern, Switzerland, that it must hand over redacted copies on its findings and court filings to three account holders. The judge is examining complaints by customers identified only as W, H and K that the regulator shouldn’t have ordered account details to be sent to the US Internal Revenue Service in February.

“It is not surprising that UBS account holders are challenging Finma’s order to release information about those accounts. Swiss law provides a mechanism whereby account holders may challenge such disclosure of information – before it is disclosed. Also, Swiss law provides for a right of appeal,” Asher Rubinstein, a partner at Rubinstein & Rubinstein, told WealthBriefing in an emailed comment.

“In other words, there exist two levels for challenging the release of information. Yet, in the UBS criminal case, it appears that Finma summarily, unilaterally and without appeal ordered the disclosure of information related to these UBS accounts,” Mr Rubinstein said.

Finma had ordered UBS to send information on some US account holders as part of the bank’s February settlement of a criminal case with the US Justice Department. Details on about 250 clients were sent. The case is separate from the civil case, settled last month, in which around 4,450 client account details will be handed to US authorities.

“From the perspective of Swiss account holders who are facing issues of non-compliance with tax laws, it would have been beneficial to know the criteria by which Switzerland will disclose account information,” Mr Rubinstein said.

“There are many people with non-compliant accounts at UBS, and all of them would like to know the criteria by which UBS will disclose the 4,500 accounts as settlement of the civil litigation. If, for instance, there is a $1 million threshold, then people with accounts less than $1 million might breathe a sigh of relief. But it is precisely for that reason that the IRS is not divulging the criteria, so that all account holders will remain nervous,” he said.

“So too with Finma, account holders are eager to learn of Finma’s criteria for divulging information. The Swiss court ordered that Finma documents be released, but the details of Finma’s decion making, the details of Finma’s criteria of which accounts should be given up, will be redacted,” he continued.

“Like the UBS settlement criteria, Finma’s criteria, at least for now, remain secret. The end result is that account holders cannot rest easy. Of course, the Voluntary Disclosure Program may offer such account holders much better terms than if they are found out otherwise. On the issue of Finma’s criteria, an open question is whether Swiss account holders have a legal right to know what Finma’s criteria are, but that is an issue for Swiss constitutional lawyers to analyze,” he added.